Turkish court issues bankruptcy order for Bank Asya

The İstanbul 1st Commercial Court of First Instance ruled on Thursday for a bankruptcy order for Bank Asya, which was closed down by government decree in July 2016 over alleged links to the faith-based Gülen movement, which the Turkish government blames for a failed coup last year.

According to the decision, Turkey’s Savings Deposit Insurance Fund (TMSF) will carry out the liquidation of Bank Asya.

Once Turkey’s largest Islamic banking institution, Bank Asya’s management was transferred to the TMSF in February 2015, and the bank was seized on dubious grounds in May 2015, with a claim that the lender’s financial management posed a threat to the Turkish banking system.

The bank’s shareholders denied the allegations and vowed to take legal action.

Established in 1996, the bank serviced its customers with 200 branches across Turkey.

In October 2016, the TMSF put a financial intermediary and two insurance units of Bank Asya up for sale.

The TMSF set the price for Işık Sigorta at TL 40.8 million and for Asya Emeklilik at TL 33.2 million, aiming to earn at least TL 74 million from the sale of Bank Asya’s shares in the two insurance companies. The bank owned 98 percent of Asya Emeklilik and 67 percent of Işık Sigorta.

Thousands of people who deposited money in Bank Asya after the ruling Justice and Development Party (AKP) government started pressuring the bank in early 2015 for its alleged links to Gülen movement were detained and arrested for financially aiding a terror group.

Deputy Prime Minister Nurettin Canikli stated in May 2017 that the AKP the government had seized 942 companies with a total value of TL 40.5 billion since the failed coup attempt on July 15, 2016.

The total equity capital of the seized companies is TL18.1 billion, while their combined turnover is TL 21.5 billion, according to a TMSF report.